News, Indian economy & everyday tit-bits by Ankur Aggarwal since 2005

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Why is peanut more expensive than peanut oil?

Why are groundnut/peanuts more expensive than peanut oil? Why are sunflower seeds more expensive than sunflower oil? Why are roasted grams more expensive than gram flour (Besan)? Even whole wheat is more expensive than the wheat flour! Flax seeds used to be cattle fodder, now you need to pay 100/- to get a fistful of them.

It is not a question of offseason fruits being more expensive than their canned/frozen/preserved cousins. I am talking about standardized dry items that have almost the same shelf life than their processed cousins. I am also not talking of fashion fads & branded items. Most of these items are available in bulk at the grocery stores.

Recently I took up gardening as a hobby. To my wonder, the cost of the seeds exceeded the value of produce. This is when my labor, organic manure (kitchen waste), planters & water were free.

I hope the manufacturer is not losing money when they grind gram/wheat into flour or extract oil from groundnut/sunflower. Most of the processed food have FSSAI mark, so I am presuming that there is no adulteration with palm oil/starch to keep the prices low. Then why is the processed food cheaper than the seeds from which they are made? No extractor can have 100% yield, some of the seed’s weight would be lost to moisture, oil-cakes, and other inedible outputs. Who is paying for these wastage?